The CIS export market for square billet is still seeing only occasional deals. At the same time, demand for semis from the Azov-Black Sea ports remains minimal due to the seasonal factor, while in Iran differed demand for semis combined with short supply has encouraged local buyers to close deals. Only SE Asian traders stay optimistic and keep booking the material despite low buying activity, which stimulates the growth of prices for Russian billet.
Middle Eastern buyers remain inactive in view of Ramadan, while most of European ones stay on holidays. At the same time, trading companies were the main customers in this destination, but contracts were few and only for up to 10,000-tonne lots. However, although the sales markets are sluggish now, most suppliers from the Azov-Black Sea ports prefer to wait rather than to step back. They expect demand to surge after summer due to a revival of the construction industry amid low billet stocks. Although a number of Russian and Ukrainian steelmakers still have some volumes of semis to be produced in September, they continue to keep nominal prices at $680-685/t FOB.
The only exception was Belarus SW which expectedly had to back down. It is reported that about 15,000 t of square billet to be shipped before October 10 (EXW, 100% pre-paid) was sold at $660-665/t FOB, by $34-39/t lower than initial levels in early August. These volumes were booked by trading companies. Besides, some 10,000 t was sold to Liepajas Metalurgs (Latvia) at $647/t DAP ($660/t FOB). The supplier reportedly has other 10,000 t of billet in stock which will be sold at the same prices.
This week, Elektrostal has offered 5,000 t of semis of end-August production at $680/t FOB Mariupol. However, as bids were coming by $15-20/t lower, the supplier preferred not to change August order book filled up back in July. The seller obviously plans to produce this amount in the second half of September willing to close sales at desired levels by that time.
Metinvest International S.A. is in no hurry to close sales expecting the situation in the export semis market to improve by the end of the month.
IUD keeps staying out of the market. As previously reported, the supplier offered only limited volumes of September output. Dzerzhinsky SW (Dneprovsky) cut production due to production problems this month, and almost no volumes of the mill’s semis were offered for export in view of the orders left from the pervious months. However, IUD resumed billet output at Alchevsk SW in August. Besides, it managed to sell all the planned volumes of September production (about 40,000 t) at about $685/t FOB in early August.
Metalloinvest plans to start active sales of September output from OEMK next week. It has voiced price idea at $685/t FOB, but contracts will hardly be made at this level given that Turkey is the key sales outlets for the mill’s square billet. As both export and domestic prices for Turkish semis hover around $685-700/t FOB/EXW excl. 18% VAT, OEMK’s material can be priced at not higher than $665/t FOB.Market players believe Turkish re-rollers can pay about $10/t more for square billet for wire rod production.
( Source: www.metalexpert-group.com )